Hey, Pelosi! Hey, Reid! Want to see a culture of corruption? Pay attention to what's going on at your precious United Nations.

by Jim Kouri, CPP

The United Nations Oil for Food Program was probably the biggest scam in the history of geopolitics. Not only did the program fill the pockets of corrupt politicians, diplomats and businessmen, but it also allowed Iraq's dictator Saddam Hussein to continue building up his military with the help of such countries as Russia and France.

The US news media continue to yawn over the UN scandal involving participants in the Oil for Food Program. In fairness, only part of the reason is the media's hesitancy to criticize an organization that is practically sacrosanct in the view of liberals. A large part of the media's failure to report on the UN malfeasance is that it is such a complicated case of fraud, duplicity and mendacity that reporters find themselves incapable of dumbing down the story for human consumption.

In 1996, the United Nations (UN) Security Council and Iraq began the Oil for Food program to address Iraq's humanitarian situation after sanctions were imposed in 1990. More than $67 billion in oil revenue was obtained through the program, with $31 billion in humanitarian assistance delivered to Iraq. The 2005 Defense Authorization Act mandated that GAO review the Oil for Food program.

The UN Oil for Food program would have benefited from an internationally accepted internal control framework to provide reasonable assurance in safeguarding assets and meeting program objectives.

Although the program averted a humanitarian crisis while limiting Iraq's ability to purchase military-related items, internal control problems allowed the former Iraqi regime to manipulate the program and circumvent sanctions to obtain billions of dollars in illicit payments.

In particular, weaknesses in the control environment of the Oil for Food program compromised oversight and made it vulnerable to fraud and abuse. For example, Iraq negotiated contracts directly with companies purchasing its oil and selling commodities.

In the absence of UN oversight, Iraq manipulated contract terms and obtained kickbacks. Moreover, the program had a complex structure with unclear lines of responsibility and authority. This diffusion among various entities meant that no single entity was accountable for the program in its entirety. This allowed all parties involved to perpetrate fraud without fear of detection.

The Oil for Food program also had weaknesses in the four key internal control standards --risk assessment, control activities, information and communication, and monitoring -- that facilitated Iraq's ability to obtain illicit revenues ranging from $7.4 billion to $12.8 billion. In particular, the UN did not provide for timely assessments to address the risks posed by Iraq's control over contracting and the program's expansion from emergency assistance to commodities for 24 sectors.

The UN Security Council established the UN Compensation Commission (UNCC) in 1991 to process claims and pay victims of Iraq's invasion of Kuwait. Security Council resolution 986 provided that a portion of proceeds from Iraq oil sales would go to the compensation fund.

The commission approved awards of $52.5 billion to more than 1.5 million claimants and has paid more than $20 billion of this amount; however, Iraq still owes almost $32.2 billion in unpaid awards. Future payments for these awards could extend through 2020. These unpaid awards are in addition to the $51 billion that Iraq owes to international creditors.

The Oil for Food program offers several lessons for designing future sanctions and strengthening existing UN programs: assess whether the sanctions program gives undue control to the sanctioned country; consider the economic impact that sanctions have on neighboring countries; ensure that all aspects of sanctions are equally enforced; establish clear authority and responsibility for management, oversight, and monitoring activities; assess and mitigate risk as programs and funding expand; and assess the role of internal oversight units and ensure that they have the resources and independence needed for effective oversight.

Jim Kouri, CPP is currently fifth vice-president of the National Association of Chiefs of Police. He's former chief at a New York City housing project in Washington Heights nicknamed "Crack City" by reporters covering the drug war in the 1980s. In addition, he served as director of public safety at a New Jersey university and director of security for a number of organizations. He's also served on the National Drug Task Force and trained police and security officers throughout the country. He writes for many police and crime magazines including Chief of Police, Police Times, The Narc Officer, Campus Law Enforcement Journal, and others. He's appeared as on-air commentator for over 100 TV and radio news and talk shows including Oprah, McLaughlin Report, CNN Headline News, MTV, Fox News, etc. His book Assume The Position is available at Amazon.Com, Booksamillion.com, and can be ordered at local bookstores. Kouri holds a bachelor of science in criminal justice and master of arts in public administration and he's a board certified protection professional.